While Commerce One doesn't provide the full spectrum of E-procurement and Internet market services, the vendor acts as a facilitator of services. "It becomes a complex project when multiple service providers get involved, but it's hard to source just one partner for these projects," says Roy Satterthwaite, VP of Commerce One's MarketSite.Net, a portal for exchanging goods and services among businesses worldwide. "A lot of companies like to have a primary consulting firm of record."

Ariba, which counts more than 70 business customers using its E-procurement software, is also an advocate of sharing project responsibilities. The company partners with systems integration firms on all its engagements, says Kirk Cruikshank, Ariba's executive VP.

Ariba's internal services organization consists of 200 employees whose role is to help customers define project management, develop a rollout plan, and transfer product knowledge to a systems integrator. "The majority of customers want to know that they have a technology partner who can take them from E-procurement to Net marketplaces," says Cruikshank.

Internet business-to-business marketplace creators such as DirectAG.com, SupplierMarket.com, and Ventro use E-procurement systems as the foundation for their services. Ventro Corp., an Internet marketplace creator for the life-sciences industry, builds and operates vertical marketplaces, including Promedix, which specializes in medical supplies; Broadlane, a joint venture with Tenet Healthcare that specializes in health-care commodities; Industria, a fluid-processing joint venture with DuPont that supplies pipes, valves, and fittings; and Chemdex, which supplies products for research scientists.

More than simply managing these Net markets, Ventro offers a technology platform that extends into its vertical markets. "We're essentially a services company because we take ownership of the Net market system for our customers, which include suppliers and buyers," says Martha Greer, VP of marketing at Ventro.

Part of this service is MarketLink, middleware written by Ventro that uses XML and EDI to integrate customer marketplace sites with E-procurement systems. MarketLink provides connectivity and integration throughout the purchasing process, from requisition generation to order submission, invoicing, and payment.

One of the differences between marketplace creators and software and service providers is that marketplace creators take ownership of the process once the E-procurement software is implemented. If an order isn't fulfilled, for example, the customer will contact Ventro, not Ariba, Commerce One, or the consulting firm they used, Greer says.

The primary advantage of this approach is that it coordinates the components of marketplace building or participation through a single source. Marketplace creators are also specific to a particular industry. "Without our vertical-market expertise, we're not adding value," Greer says.

When considering a partner in the Net marketplace space, clients should consider whether or not a particular creator will take responsibility for the implementation and performance of the system's various components, including software and supplier relations. The choice of marketplace creators is limited today, but this is expected to change as more companies look to build online trading communities within their vertical industries. The proliferation of these markets is reason enough to choose a services and technology partner carefully.

"There are going to be some spectacular disasters in the Net marketplace and E-procurement space, with people taking the technology hammer to every nail to solve all their procurement problems, much like they did with ERP," says Jim Hine, a managing director in Computer Sciences Corp.'s Consulting Group responsible for procurement.

The key to avoiding disaster is to know when to partner--and which partner is best suited to meet a company's E-procurement needs. Ultimately, the business should feel confident that its services partner, regardless of which area of the market it's coming from, has the resources to meet the evolving needs of the E-procurement implementation.

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Illustration by Noah Woods
Photo of Satterthwaite by Robert Houser